John Hancock Advisers, the Boston money manager with some $1.5 billion in taxable fixed income, has been shifting its $800 million high-yield fund into a stronger weighting in bonds issued by companies in Mexico, Columbia, and Brazil. Arthur Calavritinos, v.p. and portfolio manager, says he recently added just over 1% of his portfolio (or about $10 million) to investments in those countries, and expects to add another 5% ($40 million) by this time next year, though he isn't looking for a specific trigger for the next move.
Example of investments he's made in the last month or so include Brazilian sovereigns, and companies such as Bancomer. Pemex Finance 8.02 of '07 (Baa1/BBB+) was an initial beneficiary of the strategy, but it performed so well he sold it as it moved up to investment grade. Calavritinos believes foreign corporates have become much more savvy about communicating with investors, while some U.S. junk companies don't even return his phone calls.
Calavritinos currently holds some 89% in U.S. junk that he says is in a broad range of sectors, though he is very light (just over 3%) in pure telecom. He also has 9% invested in emerging markets, and 8% in stock for the high-yield fund. He is benchmarked against the Lipper High Yield Index.
